North American commodity resin markets took a bit of a breather in November, with only polypropylene and solid polystyrene resin prices showing any movement.
Regional prices for both PP and solid PS were up for the month. PP prices moved up 5 cents per pound, as producers gained 3 cents of margin improvement on top of a 2-cent increase in prices for polymer-grade propylene (PGP) feedstock, according to market sources contacted by Plastics News.
The November PP hike marks the sixth consecutive month that prices have moved up for that material. Those six increases now have totaled 19.5 cents. Market sources said that supplies of both PP and PGP currently are tight in the region. One source said that supplies of impact copolymer PP grades are "extremely tight, if not short."
Two PP suppliers in the region are running at reduced rates, either because of mechanical issues or difficulties in sourcing enough PGP, sources added.
"Things have tightened up again," said Scott Newell, a PP market analyst with Resin Technology Inc. in Fort Worth, Texas. "Demand was very strong in October, with multiyear highs for production and demand."
North American PP demand has been flat to slightly negative so far in 2020. The COVID-19 pandemic helped sales in medical supplies, personal protective equipment and packaging, but it had a negative effect on demand in automotive and in some durable goods applications.
In solid PS, prices moved up 2 cents per pound in November after being flat for two consecutive months. Prior to that, prices had increased a total of 7 cents in the three-month June-August period.
The November PS hike was impacted by higher prices for benzene feedstock, which is used to make styrene monomer. Benzene prices were up 14 cents to $1.55 per gallon for November, an increase of almost 10 percent vs. the prior month.
Price movement for PS in 2020 has been driven by feedstocks and not by demand for the material. The 2020 PS market "hasn't been anything to write home about," according to Phil Karig, managing director of Mathelin Bay Associates in St. Louis.
"The impact of COVID-19 has certainly affected foodservice demand for disposable PS packaging, while on the retail side, grocery takeout demand, for example, has been better," he said.
In spite of growth in those end markets, Karig said that overall PS demand is down in 2020 and could be down in 2021 as well, although foodservice demand could continue to improve.
North American PE prices were flat for the second consecutive month in October. The two quiet months ended a streak that had seen prices for that material surge upward by an average of 19 cents in the previous four months.
A recovery in PE demand following the first days of the COVID-19 pandemic and strong export demand had played a role in the previous increases. At various times since late August, more than 3 billion pounds of PE capacity operated by Westlake and Sasol Ltd. in Lake Charles, La., had been down, along with almost 1 billion pounds of PE capacity operated by Chevron Phillips in Orange, Texas. Those outages served to tighten PE supplies.
PVC prices were flat in November, ending a streak of five straight monthly hikes, including a surprising 6.5-cent jump in October. An executive at a PVC resin firm told PN that demand has been very strong in 2020, both domestically and in exports. The executive added that September and October were the highest two months for sales of PVC into siding since 2010.
Low interest rates also are helping buyers to build new homes. Construction-related uses account for around 60 percent of PVC consumption in the U.S. and Canada.
Even with a flat November, regional PVC prices have climbed 20 cents since June. Market sources said some of that amount could be given back later this year or in early 2021. PVC supplies also had been affected by hurricane-related shutdowns, although those conditions are improving.
PET bottle resin prices were flat in November after rising 4 cents in October and 2 cents in September. The beverage-heavy PET market doesn't often see price increases in cooler months.
The 4-cent October hike was the result of minor price increases for paraxylene and PTA feedstocks, combined with a surcharge from PET makers to cover spot buys of monoethylene glycol feedstock and higher freight costs, according to RTI market analyst Mark Kallman.
In feedstocks, prices for West Texas Intermediate oil began November at $35.80 per barrel but had surged up to $45.30 by the end of the month for a jump of 26.5 percent.
Prices for natural gas — used as a feedstock in North American PE and PVC — began November at $3.35 per million British thermal units but had slumped to $2.88 by the end of the month for a slide of 14 percent.